Accounting DQ 1800 words total

15 Jun Accounting DQ 1800 words total

UNTING I CLASS DQ’S WRITE 300 WORDS EACH QUESTION

WEEK 3 Beginning the Accounting Cycle

Discussion Question: 300 words

Jay Simons, the accountant of See Co., would like to buy a new software package for his general ledger. He couldn’t make the purchase because all funds were frozen for the rest of the fiscal period. Jay called his friend at Joor Industries and asked whether he could copy its software. Comment on why it is, or is not, okay for Jay to make such a request.

WEEK 4 The Accounting Cycle Continued/The Accounting Cycle Completed

Discussion 1 Question:

Where the Dough Goes . . .

No matter how harried Stan Hernandez feels as the owner of his own Subway restaurant, the aroma of his fresh-baked gourmet breads always perks him up. However, the sales generated by Subway’s line of gourmet-seasoned breads perks Stan up even more.

Subway restaurants introduced freshly baked bread in 1983, a practice that made it stand out from other fast-food chains and helped build its reputation for made-to-order freshness. Since then Subway franchisees have introduced many types of gourmet seasoned breads—such as hearty Italian or Monterey cheddar—according to a schedule determined by headquarters.

Stan was one month into the “limited-time promotion” for the chain’s new roasted garlic seasoned bread when his bake oven started faltering. “The temperature controls just don’t seem quite right,” said his employee and “sandwich artist,” Rashid. “It’s taking incrementally longer to bake the bread.”

“This couldn’t happen at a worse time,” moaned Stan. “We’re baking enough roasted garlic bread to keep a whole town of vampires away, but if we don’t get it out of the oven fast enough, we’ll keep our customers away!”

That very day Stan called his field consultant, Mariah, to discuss what to do about his bake oven. Mariah reminded Stan that his oven trouble illustrated the flip side of buying an existing store from a retired franchisee – having to repair or replace worn or old equipment. After receiving a rather expensive repair estimate and considering the age of the oven, Stan ultimately decided it would make sense for him to purchase a new one. Mariah concurred, “At the rate your sales are going, Stan, you’re going to need that roomier new model.”

“Wow, do you realize how much this new bake oven is going to cost me? $3,000!” Stan exclaimed while meeting with his cousin-turned-Subway-accountant, Lila Hernandez. “Yes, it’s a lot to lay out, Stan,” said Lila, “but you’ll be depreciating the cost over a period of 10 years, which will help you at tax time. Let’s do the adjustment on your worksheet, so you can see it.”

The two of them were sitting in Stan’s small office behind the Subway kitchen, and they pulled up this month’s worksheet on Stan’s Peachtree program. Lila laughed, “I’m sure glad you started entering your worksheets on Peachtree again! The figures on those old ones were so doodled over and crossed out that I could barely decipher them! We may need your worksheets at tax time.”

“Anything for you,” Stan said. “I may depreciate my bake oven, but my gratitude for your accounting skills only appreciates with time!”

ANSWER THIIS QUESTION FOR THE ABOVE!!

Answer the following: How do you think Lila got the information on the useful life of Stan’s bake oven and the estimate for its residual value? Why do you think she gets her information from this particular source? If Stan uses a straight-line method of depreciation and Stan’s bake oven has a residual value of $1,000, how much depreciation will he account for each year and what would the adjustment be for each month?

Explain since good accounting practices and data makes it possible for business owners to make informed choices, such as whether or not it makes sense to purchase a new bigger oven over repairing the smaller old one, why is it that so many business seem to make poor business choices?

WEEK 5 Banking Procedure and Control of Cash

Discussion 1 Question:

Subway now requires all of its franchisees to submit their weekly sales and inventory reports electronically using new point-of-sale (POS) touch-screen cash registers. With the new POS registers, clerks use a touch screen to punch in the number and type of items bought. Franchisees can quickly reconfigure prices and products to match new promotions. Not only is this POS method faster than using the old cash registers, but it also allows franchisees to view every transaction as it occurs—from their own back office computers or even from home. Also, individual POS terminals within the restaurant are linked, so franchisees are able to see consolidated data quickly.

The transition to electronic reporting and networked POS terminals, however, has not been without bumps, as Stan can testify. About six months before the deadline for all Subway franchisees to “go electronic,” Stan attended a heated meeting on the topic at his local chapter of the North American Association of Subway Franchisees (NAASF). The NAASF is an independent organization of franchisees that serves as an advisory council on Subway policies and issues of common concern. Everyone seemed to be talking at once.

“I just don’t trust these machines. What am I supposed to do when the system crashes?” complained one man. “Yeah, and I don’t like the idea of a bunch of kids knowing more about how to run the software than I do,” said one older franchisee.

“Don’t be so quick to assume that our sandwich artists will love POS,” said one woman. “I overheard one of my employees say to another, ‘POS means Peeking Over Shoulders.’ These young kids we hire have more reason to be resistant than we do!” “I’ll say they do!” rejoined Jay Harden, the president of Stan’s local NAASF.

“Employee theft is one of the largest problems we face as franchisees. I, for one, really welcome the cash control we get with POS.”

Stan had to agree with Jay. Training staff to record every sale and record it correctly is a critical component of a cash business such as Subway. In Stan’s view, the POS machines would only make that training easier. Cash control is built into the new system, which also provides the owners with information that will help them spot problems – such as employee theft – and track trends. Of course, thought Stan, the chore of counting down the cash at the end of a shift remained. No matter what type of computer program you install, cash still must be counted down and rectified with the register tape at the end of each shift.

As the voices rang louder around him, Stan thought about what had happened that day when Ellen closed out her cash register drawer. He had spent hours figuring out a discrepancy between the cash in the drawer and the register tape. Ellen had forgotten to void a mistaken entry for $99.99. Stan had first suspected that she had made a huge error in counting change.

Thinking of errors in counting brought him back to the topic of the meeting. Stan raised his hand to speak. “One thing that concerns me is the potential for accounting errors. I still have to key in data from the POS terminals into my Peachtree accounting software. Every time I have to reenter data, the potential for error multiplies.”

“That shows good foresight, Stan,” said Jay Harden. “We’re actually exploring computer programs that will feed the data directly from the POS terminals into our accounting programs.” Even some of the technophobes and POS skeptics in the group had to agree that it would be a great idea.

ANSWER THIIS QUESTION FOR THE ABOVE!!

Resistance to change is not just about lack of ability or skill, but those are important. Create a list of factors at the heart of resistance to change and, from your personal experience but targeting Stan, prioritize them. For each item on your list, suggest to Stan how he might ensure the adoption of the POS terminal will accomplish these key accounting and business goals.

WEEK 6 Calculating Pay and Payroll Taxes

Discussion Question 1:

Part 1. Payroll Records: A Full-Time Job?

Like every Subway restaurant owner, Stan needs to keep a master file of important employee information. This file contains every employee’s name, address, phone number, Social Security number, rate of pay, hours worked per week, and W-4 form.

Stan employs two part-time “sandwich artists” and no full-time managers – yet. If his sales continue to be high, he’ll need to hire someone to manage operations so that he can spend more time growing his business. That means really understanding what is going on and analyzing the financials – with Lila’s help – is a big part of that. Most restaurants hire primarily part-timers with a much smaller core of full-time employees, but the numbers vary from restaurant to restaurant. Benefits vary too.

Stan, for instance, plans to offer health and dental benefits when he hires a manager. He knows what a great incentive these benefits are, with health costs so high. He pays his sandwich artists, Rashid and Ellen, the minimum wage because they both have less than a year’s experience. However, he’s talking to Mariah Washington about creating some incentives to keep them motivated. If Rashid and Ellen are with him for a full year, they’ll see a nice raise in their biweekly paychecks.

Stan must record all this vital information and report it to the various state, local, and federal authorities. In addition, Stan includes total payroll expenses on the weekly sales and inventory report, which he submits electronically to headquarters from his point-of-sale (POS) screen. Since both the frequency of payments of taxes and the tax rates vary by state and sometimes by city or county, the POS system is much more complex than any one individual would need, but Stan is coming to appreciate the new enhancements he has been seeing.

Scheduling workers and keeping payroll records are the bane of Stan’s existence. These tasks are so incredibly time consuming. He was pleased to hear, then, at the last meeting of his local North American Association of Subway Franchisees (NAASF) that the new POS terminals will soon offer an electronic scheduling package.

“Wow! That will really help,” said Stan cheerfully to another franchisee. “No more different colors of ink just to keep track of who will work when! Now I can plan around Rashid and Ellen’s exam schedules without a hassle. Scheduling might just become my favorite module in the new system.”

“Sure,” said Javier Gonzalez, another owner. “Now you can concentrate on payroll records. What fun!”

“What a drag!” Stan groaned.

Part 2. Hold the Lettuce, Withhold the Taxes

“As an employer, Stan, what are your tax responsibilities?” asked Angel Tavarez, president of the Los Palmos Kiwanis club. They were at one of the luncheons sponsored by the club every month, and Stan had been asked to join a discussion on the role of small business in the local economy. Fortunately, Angel had told the panelists the questions in advance, so Stan had his answers ready.

“Well, of course, I pay city, state, and U.S. government taxes myself. I also have to file city, state, and federal withholding taxes for each of my two employees. I have to withhold state unemployment taxes, as well as FICA, which is another name for OASDI and Medicare taxes, for each of them. I pay workers’ compensation, too,” said Stan.

“That’s strange,” said a voice from the audience. “My brother-in-law has a Subway restaurant in the southern part of the state, and he doesn’t pay any city taxes. What’s going on here?”

“Naturally, the situation is slightly different for Subway owners in different cities in our state—and across the country,” said Stan confidently. “Not all cities have city income taxes. Different states have different regulations about workers’ comp as well.”

“Oh, right,” said the voice, sounding embarrassed. “So, Stan, how often do you have to pay taxes?” asked Angel Tavarez, shifting the topic diplomatically.

Stan picked up a piece of chalk and drew four large circles on the blackboard. Then he wrote the word “ASPIRIN” in each of the circles. A murmur of “Huh” and “What” went around the room.

“The average employee working for a company pays taxes once a year on April 15 and has one big tax headache. As an employer,” Stan said, “I file tax returns on a quarterly basis, so I have four big tax headaches a year! Rather than filling out the 1040-EZ, I complete the Form 941, the Employer’s Quarterly Federal Return, to report and pay payroll taxes to the IRS. Yet, while the form is due quarterly, I actually need to deposit the tax money into a Federal Reserve Bank once a month.

In addition, I have to file the 940 at the end of each year to pay my federal and state unemployment taxes. Then, for each employee. . . .” “Stan,” Angel interrupted, “I’m afraid time is running out for your segment of the panel discussion. We’ll move on to Pamela Pudelle, who is going to tell us about advertising her new pet-grooming parlor.”

Later, during the reception, Stan tapped Angel on the shoulder, “Sorry I went over my time limit,” he said. “You didn’t really go over,” said Angel, “but you were getting a little too technical for the audience.” While Stan was sorry to have let the discussion veer off course, he felt a little burst of pride: Who would have thought a year ago that he would be willing – and able – to expound about the tax burden of a small business owner!

ANSWER THIIS QUESTION FOR THE ABOVE!!

The roles and responsibilities of a business owner are broad and complex. The decision to off-load some to many of the burdens onto an office manager or an accountant is very attractive, but each such decision comes with consequences. Considering Stan’s situation and your growing insight about him, describe the pros and cons of hiring someone to “manage the operations”. How would you counsel Stan in hiring this person and allocating responsibilities in order to maximize his chances of success?

WEEK 7 Sales and Cash Receipts/Purchases and Cash Payments

Discussion Question:

Spring Co. bought merchandise from All Co. with terms 2/10, n/30. Joanne Ring, the bookkeeper, forgot to pay the bill within the first 10 days. She went to Mel Ryan, the head accountant, who told her to backdate the check so that it looked like the bill was paid within the discount period. Joanne told Mel that she thought they could get away with it. Should Joanne and Mel backdate the check to take advantage of the discount? You make the call. Discuss your specific recommendations to Joanne.

WEEK 8 Merchandise Company Worksheet and Accounting Cycle

Discussion Question:

Jim Heary is the custodian of petty cash. Jim, who is short of personal cash, decided to pay his home electrical and phone bills from petty cash. He plans to pay it back next month. Do you feel it is okay for Jim to do this? Explain your answer.